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US: Wall St falls as election uncertainty rattles investors

Wed, Nov 02, 2016 - 10:10 PM

PHOTO: BLOOMBERG

[NEW YORK] US stocks opened lower on Wednesday, with the S&P 500 falling for the seventh straight day as a tightening race for the White House prompted investors to seek safe-haven assets such as gold.

Investors are rethinking their long-held bets of a Nov 8 victory for Democrat Hillary Clinton amid signs that her Republican rival Donald Trump could be closing the gap.

While Mrs Clinton held a 5 percentage point lead over Trump, according to a Reuters/Ipsos opinion poll released on Monday, some other polls showed her Republican rival ahead by 1-2 percentage points.

"As the polls change, the market is growing more nervous and is beginning to price in a Trump presidency," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.

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Gold hit a near one-month high earlier in the day, suggesting investor anxiety over the election.

Wall Street closed lower on Tuesday, with the S&P 500 ending the day at the lowest level since July 7. The index had breached a key technical level earlier in the session.

The selloff in equities comes as the Fed holds its two-day policy meeting, with a statement due at 2 pm ET (1800 GMT).

While traders do not expect the central bank to raise interest rates just a week before the election, they are looking for clues that the Fed is set to hike rates in December.

Traders are pricing in a 73.6 per cent chance of a December hike, according to CME Group's FedWatch tool.

At 9:36 am ET the Dow Jones industrial average was down 39.21 points, or 0.22 per cent, at 17,997.89.

The S&P 500 was down 4.59 points, or 0.22 per cent, at 2,107.13.

The Nasdaq Composite was down 8.99 points, or 0.17 per cent, at 5,144.59.

All 11 major S&P sectors were lower, with the rate-sensitive utilities index's 0.84 per cent fall topping the decliners.

The energy index was down 0.74 per cent as crude oil prices fell for the fourth day after industry data showed a surprise build in US stockpiles. Oil has lost 10 per cent in the last two weeks.

Data showed US private employers added 147,000 jobs in October, falling short of expectations. Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 165,000 jobs.

Third-quarter earnings of S&P 500 companies are expected to rise by 3.2 per cent, according to Thomson Reuters I/B/E/S data, ending a year-long earnings recession.

Alibaba Group shares rose 1.5 per cent to US$102.62 after the Chinese e-commerce firm's second-quarter revenue beat estimates. Yahoo, which has a 15 per cent stake in Alibaba, was up 1 per cent.

Brocade Communications was up 9.1 per cent at US$12.25 after chipmaker Broadcom said it would buy the company for US$5.5 billion. Broadcom was up 1.1 per cent at US$170.50.